Case Name: Maria Bodadilla v. Henley Restaurants, Inc., et al.
Case No.: 16-CV-293598

This is a putative wage and hour class action by employees of defendant Henley Restaurants, Inc., the operator of seven McDonald’s restaurants in San Jose and Morgan Hill. The parties have reached a settlement, which the Court preliminarily approved on December 4, 2017. Plaintiff now moves for (1) final approval of the settlement and her enhancement award and (2) approval of her attorney fees and costs. Plaintiff’s motions are unopposed.

I. Legal Standard for Approving a Class Action Settlement

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794.)

In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.)

The list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.) The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.)

II. Terms and Administration of the Settlement

The terms of the settlement are as follows. The gross settlement is $950,000, and the settlement is non-reversionary. Attorney fees of up to $316,666 (one-third of the gross settlement), litigation costs estimated at $15,000, and administration costs of approximately $30,000 will be deducted from the gross settlement. In addition, the named plaintiff will seek an enhancement award of $10,000. Defendant will pay its share of payroll taxes in addition to the gross settlement amount.

The net settlement will be distributed to class members pro rata based on their weeks worked during the class period, with 1/3 allocated to W-2 wages and 2/3 to interest and penalties. Class members will not be required to submit a claim to receive their payments. Funds associated with checks uncashed after 120 days will revert 25% to the Trial Court Improvement and Modernization Fund, 25% to the Equal Access Fund of the judicial branch; 25% to the East Bay Law Center, and 25% to Bet Tzedek Legal Services (which provides free legal services to low-income individuals and families in Los Angeles).

Class members who do not opt out of the settlement will release claims “that are alleged in the Action or that arose out of or relate to the facts, acts, [etc.] alleged in the Action, and which arose during the operative class period.” The class representative has agreed to a broader release of all employment-related claims.

The notice process has now been completed. There were no objections or requests for exclusion from the class. Of 1,470 notice packets, 132 were re-mailed to updated addresses and 47 were ultimately undeliverable. 19 class members submitted workweek discrepancy forms. It was determined that 7 of these submissions merely reconfirmed defendant’s data and 10 of the submissions were refuted by defendant’s data. The remaining two forms were found to justify adjustments to the class members’ workweeks, and raised the aggregate workweeks for the class from 76,606 to 76,613. Given these results, the claims administrator estimates that the average settlement award will be $393.42 and the maximum award will be $2,242.99.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiff’s claims. It finds no reason to deviate from this finding now, especially considering that there are no objections. The Court consequently finds that the settlement is fair and reasonable for purposes of final approval.

III. Attorney Fees, Costs, and Enhancement Award

Plaintiff seeks a fee award of $316,666, or 1/3 of the gross settlement, which is not an uncommon contingency fee allocation. This award is facially reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney fees from the fund itself. Plaintiff also provides a lodestar figure of $145,650, based on 256.4 hours expended on the case by attorneys with billing rates ranging from $375 to $725 per hour. The lodestar results in a reasonable multiplier of 2.17. As a cross-check, the lodestar information supports the 1/3 percentage fee requested, particularly where there are no objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (2016) 1 Cal.5th 480, 503-504 [trial court did not abuse its discretion in approving fee award of 1/3 of the common fund, cross-checked against a lodestar resulting in a multiplier of 2.03 to 2.13].)

Plaintiff also requests $9,453.51 in litigation costs, below the $15,000 estimate that was provided at preliminary approval. The costs appear reasonable and are approved.

The administrative costs were estimated at $30,000. In a supplemental declaration filed on March 13, 2018, the administrator states that $12,270 in administrative fees and costs have been incurred so far, and estimates that the total cost to administer the settlement will be $20,129, with a balance of approximately $9,871 to be distributed to the class. These administrative costs are approved.

Finally, plaintiff Maria Bobadilla requests a $10,000 service award. To support her request, she submits a declaration describing her efforts on this action over nearly two years. The Court finds that the class representative is entitled to an enhancement award and the amount requested is reasonable.

IV. Conclusion and Order

The motion for final approval is GRANTED.

The following class will be certified for settlement purposes:

All individuals employed by Henley as non-exempt employees from April 7, 2012 to December 4, 2017.

The Court will prepare the order.

Ms. Bobadilla’s name is apparently misspelled in the case caption.